Next Lowers Sales Outlook on Concern Over Collections

LONDON, United Kingdom — Next Plc, the U.K.'s second-biggest clothing retailer, lowered its full-year sales forecast, saying some collections aren't as strong as they were a year ago.

Full-price revenue growth for the current fiscal year is anticipated to be 1.5 percent to 5.5 percent, the Leicester, England-based retailer said Thursday, compared with a previous forecast of 2.5 percent to 7.5 percent.

“Although the consumer economy looks benign, we remain very cautious in our sales budgets,” the company said. “Whilst we are happy with most of our current product ranges, we recognize that some collections are not as strong as they were at this point last year. In addition, during the spring and summer seasons, we face very tough comparative numbers from last year, when sales were assisted by unusually warm weather.”

With more than 500 stores in the U.K. and Ireland and nearly 200 elsewhere, the retailer has expanded its online business into 70 countries, helping it surpass main U.K. competitor Marks & Spencer Group Plc in earnings and market value. Next lags behind its U.K. rival in terms of absolute sales, with M&S getting almost half its revenue from food.

Underlying pretax profit rose 13 percent to 782 million pounds ($1.2 billion) in the 12 months through January, Next said Thursday. The average of 23 analyst estimates compiled by Bloomberg was for 777 million pounds.

Full-year sales under the Next brand advanced 7.6 percent, with revenue at its stores up 4.8 percent and sales for its home-shopping business up 12 percent.

By Katarina Gustafsson. Editors: Matthew Boyle, Paul Jarvis, Robert Valpuesta.